A caption in my last post pointed out that John F. Kennedy viewed reading The New York Times as perhaps more enlightening than poring over government intelligence reports.
I am not privy to CIA or other such “intel,” but from where I sit so-called “newspapers of record” remain a great source of both hard news and especially news analysis. And in this digital age, you may not even have to fork over a buck or more to read these publications as many, including The Times, make their entire content available free of charge online.
Case in point: A piece by Larry Rohter in the edition for August 3rd, “Shipping Costs Start to Crimp Globalization,“ explains how the massive spike in fuel costs is already leading some global manufacturers to rethink their supply chains including where they manufacture their goods in the first place.
“Many economists argue that globalization will not shift into reverse even if oil prices continue their rising trend,” Rohter writes. “But many see evidence that companies looking to keep prices low will have to move some production closer to consumers. Globe-spanning supply chains — Brazilian iron ore turned into Chinese steel used to make washing machines shipped to Long Beach, Calif., and then trucked to appliance stores in Chicago — make less sense today than they did a few years ago. ”
Supporting his argument, Rohter points out that the Swedish-based global home-furnishings giant Ikea opened its first U.S. factory in May and some electronics firms that departed Mexico for the lower wages paid in China are now coming back to our southern neighbor “because they can lower costs by trucking their output overland to American consumers. ”
“Made in China” labels may become less ubiquitous due to global fuel costs.
Ah, yes, that word: trucking! Rohter observes that the industries most likely to be affected by the upturn in transportation costs are those producing heavy or bulky goods that are expensive to ship relative to their sale price.
As an example, he states that China’s steel exports to the U.S. “are now tumbling by more than 20% on a year-over-year basis, their worst performance in a decade, while American steel production has been rising after years of decline.” He says that “motors and machinery of all types, car parts, industrial presses, refrigerators, television sets and other home appliances could also be affected.” And he adds that “industries that require relatively less investment in infrastructure, like furniture, footwear and toys, are already showing signs of mobility as shipping costs rise.”
You don’t even have to read between those lines to see opportunity knocking for truck fleets to haul the inbound and outbound freight these manufacturing plants of all type will generate, right here at home.
While business leaders and investors may count on an army of economists or other financial tea-leaf readers to help them gauge the health of our nation’s economy, I bank on the American trucking industry.
Just as they say in regards to presidentiual elections “as Ohio goes, so goes the nation,” (at least until Clinton took the Buckeye State in this year’s primary…) I say as trucking goes, so goes the economy!
I am by no means the genius who figured that out but it has been proved time and again– going back for me to when I first started reporting on this industry in the economic recession of 1980-81– that trucking is the leading indicator of when the economy is about to slide into a downturn of one degree or another and also when it is about to climb back once more.
The proof, as a math whiz might say, is in the numbers. Alright then, check out this bellwether chunk of data: The American Trucking Associations’ (ATA) is reporting that its advanced seasonally adjusted “For-Hire Truck Tonnage Index” increased 1.3% in June– marking it second consecutive month-to-month gain (it rose 0.5% in May).
ATA says the seasonally adjusted index was 5.4% higher compared with June 2007, marking its eighth consecutive year-over-year increase. What’s more, “this improvement was the largest year-over-year gain since January 2005, just surpassing the 5.3% jump in January 2008.”
That’s not really red ink: DOT map shows just what highway freight density looks like in tons
I don’t speak much in numbers but those numbers sure sound good to me. ATA chief economist Bob Costello is more cautious as is the wont of economists– none of whom can afford to be labeled cockeyed optimists. In my defense, though, I will point out he characterizes the June tonnage reading as “solid” and says it aligns with “several anecdotal reports from motor carriers.”
Nonetheless, Costello forthrightly suggests it is a “close call” whether the economy will dip into a recession later this year or will only “significantly” slow down.
“It seems that truck tonnage is once again leading the U.S. economy,” Costello says. “During the 2000-2001 cycle, trucking pulled out of a recession before the aggregate economy fell into one. Unfortunately, truck tonnage could slow later this year as the overall economy is expected to be quite weak in the fourth quarter and the first quarter of next year.”
Costello adds that trucking capacity has “tightened significantly” as high fuel prices drive some carriers out of the market. At the same time, carriers have reduced fleet sizes. He notes some carriers have even shipped their trucks to foreign buyers in Eastern Europe and Central and South America– and he expects these trends are “likely to continue in the near term.”
I figure the economy– which is no monolith but a living, breathing entity with literally millions of nerve endings constantly interacting and reacting– is even as we speak re-organizing itself Medusa-like into something stronger and more flexible and thus much better configured to deal with the changes now roiling both the national and global socioeconomic fronts.
My personal bet is that this pickup in freight now being reported foreshadows a gradual return to better times for the US economy.
To go yet further out on a limb– to where economists dare not go– I further wager that the recovery will gain momentun once we have elected a new President this Fall. I know which one I want to see win, but the point here is that both “presumed nominees” are clearly leaders who will not shirk from the tasks at hand. Simply put, I think having either of these leaders in the Oval Office will help shift our economy back into high gear by next year.
The challenge for fleet owners will be how to manage between now and then. That will require being as well-informed as possible about all the winds of change buffeting our economy– starting but certainly not ending with the trucking industry.
“I don’t think the intelligence reports are all that hot. Some days I get more out of The New York Times.”
The time to begin writing an article is when you have finished it to your satisfaction. By that time you begin to clearly and logically perceive what it is that you really want to say.
– from “Mark Twain’s Notebook” by Samuel Langhorne Clemens
All of us here at FleetOwner are rather pumped having just learned the editors and designers on staff will soon receive no less than six “Azbee” awards for editorial excellence from the American Society of Business Publication Editors (ASPBE). Founded in 1964, ASBPE is a professional association for editors and writers employed in the business, trade and specialty press (or in what we unromantically call today “the media.”)
Four are national awards: Feature Article (”Fuel: Diesel & Beyond,” Aug. ‘07); Special Supplement (our special annual “13th” issue Can You Survive? , ” Nov. ‘07); Annual Buyers Guide (”Annual Specs & Buyers Guide,” Oct. ‘07), and Front Cover Design (”Annual Specs & Buyers Guide,” Oct. ‘07).
The other two awards are for the Northeast Region, which includes all publications based in Boston, New York and Philadelphia. FleetOwner is being recognized for the categories of Editorial/Editor’s Letter (”Editor’s Page,” July and Aug. 2007), and Front Cover Design (”New Models,” July 2007).
In any line of work it’s always nice to receive the equivalent of a standing ovation for your efforts but it is ever more satisfying when the applause comes from your professional peers.
We daresay this recognition should also please our readers. The multiple national Azbees in particular reflect the impact the combined efforts of the entire editorial and design team delivers not just now and then, but issue after issue, month after month in print, and day after day online.
Yes, OK, we like to win awards as much as the next guy.
But above all, we take pride in knowing what we do is all about you.
People around my age– let’s be kind and call them late-stage baby boomers– and definitely those who are older may recall a phenomenon from their misspent youth or further back in their carefree childhood: The Gas War.
Back when “service stations” (how quaint a description is that?) gave away embossed drinking glasses and other consumer detritus to lure customers in to tank up, proprietors sometimes sought to drum up sales a tad more dramatically by engaging in a little friendly price war with neighboring stations. Suddenly, gas wasn’t 30 cents a gallon, it was 29, then 28 and oh my gosh, weren’t those the good old days for anyone with wheels to take them places?
I know it’s not nearly the same thing but now in this summer of our discontent made ugly winter by this fuel crisis, I say we can take heart in a wonder of the wonderful worldwide web: a feature on the MSN Autos site that pulls up retail gas prices by zip code!
Yes, this will be of little use to centrally fueled fleets but it may come in handy for anyone managing a fleet, especially of gas jobs, who does not have a fuel card or other such program in place to secure discount pricing. Regardless, it should be of great service to anyone out there seeking to gas up a personal vehicle for as little as possible without wasting gas by riding around looking for the lowest price.
Before I forget, a tip of the editorial eyeshade to my pal Alicia Hinds, who alerted me to this site via an email she sent out this morning to a group of friends.
OK, on to the details: Once you get to the MSN page hosting the Local Gas Prices feature, you scroll down just a bit and plug in any zip code.
And presto, up pops a map and a nice long list of stations with their addresses and the retail price posted for each grade of gasoline as well as diesel that they sell. It could not be any easier and judging by the couple of stations I passed on the way into work today and the prices reported for my home zip code, it is accurate.
According to the site, every night MSN Autos receives pricing data compiled by theOil Price Information Service (OPIS) from over 90,000 gas stations. One thing I found interesting was, at least in the case of my home zip, was that the results– 29 of them– were fantastic but they actually spilled into several neighboring zip codes although all stations were a short drive from each other.
So, party like it’s 1968 (click below for how) and find yourself if not cheap gas, at least the cheapest gas!
As someone with no dog in this fight except for journalistic endeavor, what fascinates me the most about the big Caterpillar-Navistar deal, word of which broke this morning, is that among other weightier things, it means the death of one Cat come 2010– the heavy-duty on-highway Caterpillar truck engine in North America– and the birth of another– the Caterpillar severe-service truck.
That’s right! A Cat truck–how cool is that? Well, pretty cool to yours truly anyhow, who entered this business shortly after the Brockway Husky was put to sleep and shortly before the fabled, hand-built Marmon of Garland, TX, fame went to the great truckstop in the sky. And I am sure among my elders still scribbling about trucks there are a few who can rattle off many more names of other dearly departed truck marques.
Yes, it is good to hear that another truck nameplate will be soon be around for us to track in FleetOwner’s annual July New Models issue. .. coming soon to mailboxes everywhere and here online!
I will pause here to salute Cat for all it has done for American truckers as a purveyor of on-highway truck engines.
It has indeed been a good long run for the truck engine guys in Peoria and they have every reason to be proud of their accomplishments as they helped move the state of the art in diesel trucking forward.
I’ll close by recalling one of the first big events I covered as a trucking journalist– the trend-settting “Cat Economy Challenge” of 1981.
That nationwide MPG competition lasted for months and engaged both fleets and owner-operators in a huge contest for prizes and bragging rights. I’m sure it helped sell tons of truck engines.
Click below to enjoy a tribute to one of Cat’s legendary driver-trainers– Phil Hook- whom I first met at the Challenge:
But the Challenge also helped sell an entire industry on how much fuel, and thus money, can be saved just by learning how to drive a truck in a manner that made finely engineered engines perform to their maximum ability.
So here’s to you, Cat: a tip of my very oldest, circa 1981 “gimme cap,” which kinda looks like this one.
–chorus of Weezer’s “Only in Dreams,” words and music by Rivers Cuomo
I’ve never listened to the rock band Weezer so I can’t say whether I have missed anything. But I can honestly say I was touched by the lines above when I went a-googling the lyrics of the band, which was the hands-down favorite of my late colleague Terry Nguyen.
My search was for a kind of link if you will back to Terry so I could somehow, hopefully fittingly, commemerate his tragic death one year ago June 1st and, above all, to illuminate the short yet shining life he led.
Then it struck me that the best way to recall Terry at this time would be to share with you some of his own words.
The passage below was penned as part of an essay Terry wrote in 2007 to win one of the Young Leaders Scholarships presented by the American Society of Business Publications Editors to promising young journalists. He won that prestigious honor but died shortly before it was to be bestowed.
Please pause for a moment and reflect on what this wonderful young man, just 27 at his passing, had to say when he recalled an incident that helped inspire him to be a journalist:
“I vividly remember at UConn [The University of Connecticut] working on a story that had moved me more than any other. A music student was performing a practice recital in front of her classmates when she collapsed onstage and died shortly thereafter. I learned that she played the trumpet with a prosthetic arm. I spoke with her friends, her teachers, university officials, and her father — who at times fought through tears to speak to me. For obvious reasons, it was an extremely sensitive topic, and I got no sleep the night my article was sent to the printer.
“I bring this particular story up because I learned very early in my career the value of journalism. What I wrote has an impact on how a deceased person will be remembered, and that article is most likely sitting in a scrapbook right now. This example illustrates why I believe journalism is truly a public service — one that’s worth preserving with integrity at whatever cost.”
Not at all unlike auto giants GM and Ford– and diesel engine maker Cummins among other manufacturers serving trucking here– North American-based automotive parts suppliers are apparently prospering by going global.
According to a report by The Wall Street Journal today, both Visteon Corp. and TRW Automotive Holdings Corp. have “joined the growing list of parts suppliers reporting improved financial results thanks to cost cuts and efforts to penetrate international markets, even as the outlook worsens for car and truck sales in North America.”
The reporter goes on to observe that “Most U.S. parts makers… have spent the past few years closing plants in North America and moving production to low-cost countries. Most have cut their North American work force.”
So this is really a good news-bad news story. It can’t be all bad for the U.S. economy (and presumably the Canadian, too, given its huge role in auto and truck production) for these North American industrial powerhouses to be doing well financially; it certainly can’t be bad for their stockholders and maybe not even for their customers.
On the other hand, the shift of automobile and auto parts production overseas not only removes high-paying factory jobs from North America, it reduces the amount of that outbound freight available for U.S. and Canadian motor and rail carriers to haul to ports.
I know free-traders would argue that those factory jobs will be duly replaced by high-tech or service jobs including those in the so-called “knowledge sector” and they may be right, although I for one am not entirely sure they are.
But one thing I think everyone in trucking can question is this: Will the automotive freight now being created elsewhere in the world ever be replaced here by anything a truck can haul?
Where have all the parts gone? Gone to overseas many have…
It was just last week that Ford Motor Co. surprised many by reporting strong first-quarter results.
Ford’s long-term strategy of emphasizing global growth was credited in large part with that performance: “We had a challenging first quarter due to market conditions and the slowing economy,” said chairman & CEO Mike Bannister according to a news release. “However, our strong underwriting and risk management practices continue to generate high-quality assets. Our global transformation begun a decade ago has laid a solid foundation to help us weather challenging business conditions.”
The only shame is that the folks in the Glass House did not see the outside world clearly enough to have started the “global transformation” long long ago, as their competitors in places like Toyota City did– long long ago.
The view from this glass house is looking up lately…
But don’t take it from me that one of our nation’s industrial powerhouses is back on track. Nope, much better to listen to gazillionaire gadfly and corporate raider extraordinaire Kirk Kerkorian. According toThe New York Times this morning, Kerkorian, via his Tracinda Corp. investing arm, “had acquired a 4.7 percent stake in the Ford Motor Company and planned a $170 million cash offer for an additional 20 million shares.”
This bid of course follows Kerkorian’s earlier attempts to buy Chrysler and also attain a big enough stake in GM to influence its global course.
Ford execs, not to mention members of the still-ruling family, are perhaps less than joyful about Kerkorian’s appearance at their gates. “We welcome confidence in Ford and the progress we are making on our transformation plan,” said a statement issued by the autmaker and reported by The New York Times. “Any investor can purchase Ford shares, which are sold on the open market. The Ford team remains focused on executing our plan to transform Ford into a lean global enterprise delivering profitable growth for all.”
They might not like having crafty old Kirk trying to gain leverage on them; that is understandable. But getting that kind of attention does show that Ford’s latest “better idea” is working… and what’s bad about that?
It seems like just yesterday I was first introduced to the Modec– an electric truck headed to the U.S. from England– by a rather eccentric and yet altogether fitting indoor test drive.
The Modec gets its good looks from its mother– the London taxi cab!
I took my silent spin in a Modec back in February at the National Truck Equipment Assn. (NTEA) Work Truck Show in Atlanta and my write-up ran in our April print edition but may be read online here.
At the NTEA show, the chairman of Coventry-based Modec Limited, Jamie Lord Borwick, stated that the OEM, whose roots are in the manufacture of London’s iconic black cabs, was exploring its options but gave no definitive time frame for when it might enter the truck market here.
Yet now I hear tell from William Doelle, director of business development for the young truck maker’s U.S. operation, that “in part owing to the favorable comments from journalists, and our winning the innovative product of the year [award] at the Work Truck Show, we have moved up our U.S. launch date… We are going to launch a select fleet of 50 Modecs– or more– in Washington DC starting in January of 2009.”
In the very early ’80s, yours truly was dispatched to Vegas (back when the town still seemed to have a Rat Packer or two floating around) for a very razz-ma-tazz roll-out of Isuzu commercial trucks in the U.S.
Now the thing is I can’t recall whether the work trucks or the cars, pickups and SUVs (sold by a separate division) got here first but what I remember the best about the truck intro was a very slick video Isuzu ran. It emphasized the firm’s long and fabled automotive history and that the company name was correctly pronounced “Eee-zoo-sue,” NOT “Eye-zoo-sue,” which seems to be what many truckers prefer.
Well, you say “Isuzu” and I say “Isuzu,” but it doesn’t change the news the Japanese automaker has announced it is pulling out of the U.S. consumer market, as revealed on autoblog.com.
However, the OEM did state it is not– I repeat, not– leaving the commercial end of the market.
“Isuzu Motors Limited has decided to end its North American SUV (Sport Utility Vehicle) new vehicle sales business as of January 31. 2009,” according to the press release posted on autoblog.com. “With this decision to end SUV operations, Isuzu’s North American business will focus on the CV [commercial vehicle] and PT [diesel engines and components] businesses.”
Of course, Isuzu has built an enviable reputation as a truck supplier here in the states and benefited from a long-term relationship with General Motors that was reconfigured last year.
As a result, Isuzu Commercial Truck of America Inc. (ICTA) is now distributing its low-cab-forward vehicles directly to both the Isuzu dealer network and GM’s network of Chevrolet and GMC medium-duty dealers.
Clearly, trucks are where the bucks are. But anyone who remembers any of the rather nifty cars Isuzu peddled here back in the day– the Giorgetto Giugiaro-designed Impulse leaps to mind– not to mention the no-nonsense Trooper SUV– may again enjoy hearing a message from their very twisted U.S. pitchman, good old Joe Isuzu:
